Just as CIA and FBI agents gather and analyze information before deciding how to handle cases, so do companies that use marketing intelligence. Although not as intriguing as espionage, marketing intelligence is the process of gathering, analyzing and disseminating data relating to customers, products and services, and business competitors. Three examples of marketing intelligence are competitor intelligence, product intelligence and market understanding.

The History

Marketing Intelligence is based, in part, on military intelligence operations. William T. Kelly, president and co-founder of BioInformatics, a market intelligence firm focused on the life sciences, is credited with introducing the concept in 1965. Today, marketing intelligence is more closely associated with market research. The difference between the two concepts is that market research usually is conducted for developing new products.

Intelligence versus Information

Information is made up of statistics, numbers and bits of data about competitors, customers, products and marketing strategies. Gathering information is just a first step in marketing-intelligence strategies; information doesn’t become intelligence until it’s analyzed. Company leaders use marketing intelligence to decide, for example, which products to discontinue or what customers to target.

Competitor Intelligence

Competitor intelligence isn’t spying on the competition; it’s based on the ethical collection of information, including government databases and public records, that’s openly available. The Society of Competitor Intelligence Professionals even has a code of ethics for its members.

Japan successfully used competitor intelligence to enter -- even dominate -- the U.S. automobile market in the 1970s. High oil prices and smaller families created a demand in the U.S. for the high-quality, fuel-efficient cars Japan ultimately produced. Wal-Mart stores’ use of competitor intelligence led it to construct state-of-the-art distribution centers to keep its customers from being frustrated about back-ordered merchandise, which Sears’ customers experienced.

Product Intelligence

An example of product intelligence is studying how your competitor is pricing and placing its products so you might gain a larger share of buyers in the same market. For example, you might find that your competitor lowered the price of a certain model of vacuum cleaners. Through other analyses, you also might find that the reason for the price drop is that the company is introducing a new model in the series and wants a quick sale of the old model. These findings could help you decide to introduce a new model of vacuum cleaners for a different market.

Market Understanding

You have “market understanding” when you know your company’s market share, that is, the percentage of your industry or market’s total sales during a certain time period. You're also savvy when you know the size of the market and in which markets to place your products in the future.

Market understanding also includes “customer understanding.” You’re knowledgeable about customers when you know who they are, what they want and their level of satisfaction or loyalty. Your targeted customers might be, for instance, single, retired consumers, ages 50 to 75, who like traveling to warm, exotic locations. Your agency books trips to the kind of unusual places they prefer. And you periodically survey them to gauge how pleased they are with your agency’s service.